The Treasury has confirmed it will fund tunnelling to bring HS2 trains to the line’s central London terminus at Euston but not for the station itself.

Rachel Reeves delivered the government’s first Budget this afternoon, promising a series of major investments in transport infrastructure across the UK.

Rachel Reeves on Downing Street before delivering today’s Budget

An announcement on Euston was widely expected following comments earlier this month from transport secretary Louise Haigh, who said it would “never have made sense” to end the high speed line at its current terminus at Old Oak Common, in north London.

The chancellor has now confirmed government backing for tunnelling between Old Oak Common and Euston without providing any detail on how the new terminus will be funded.

Instead, Treasury documents say the commitment aims to “catalyse private investment into the station and local area”.

Labour has previously indicated that it would also require private funding to move forward with the scheme.

Plans for a new 10-platform station at Euston were shelved under the previous Conservative government as part of broader cuts to the wider HS2 project made in an effort to control spiralling rising costs.

Former transport secretary Mark Harper announced last March that the station would be redesigned to have just six platforms and that the project would not progress until private funding could be found.

Reeves announced this afternoon that former Lendlease managing director for Europe development Bek Seeley would be appointed as chair of the Euston Housing Delivery Group to “drive forward an ambitious housing and regeneration initiative for the local area”.

>> See also: HS2 contracts under review as government rules out resurrection of second phase

Seeley left Lendlease in 2023 to establish regeneration developer Place Partners, which is based in London and Birmingham.

The Treasury has forecast capital expenditure of £20.6bn on transport projects in 2024/2025 and £21.8bn in 2025/2026, although real terms capital spending on transport is set to fall by an average of 3.1% over the next two years.

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This is due to temporary funding increases in 2023/2024 under the previous government which saw capital spending rise to £22.1bn, including one off additional funding for HS2 to manage inflationary pressures, temporary uplifts to local roads maintenance funding and funding for Transport for London’s funding settlement, which ended in March 2024.

The chancellor also promised to secure delivery of the Transpennine Route Upgrade between Leeds and Manchester and “maintain momentum” on the Northern Powerhouse Rail scheme by “progressing planning and design works to support future delivery”. 

Reeves also signalled the government would remain committed to the East West Rail scheme between Oxford and Cambridge and promised to launch a new consultation on the line next month.

An additional £200m will be provided for City Region Sustainable Transport Settlements,  bringing local transport spending for metro mayors in 2025-26 to £1.3bn.

Transport for London’s capital renewals programme will be handed £485m in 2025/2026, including funding for rolling stock on the Piccadilly and Elizabeth Lines.

Local authorities will also be given £100m to fund cycling and walking infrastructure in 2025/2026, including for upgrades to pavements and paths.

The Treasury has been contacted for comment.